PETALING JAYA: Malaysia’s economy will be resilient against the impact of future crises as it is anchored by sound government policies, a diversified structure with low dependence on commodities, wide mix of trading partners, and a strong and stable financial system, said Bursa Malaysia chairman Tan Sri Abdul Wahid Omar.
“The Malaysian economy expanded strongly by 8.9% in the second quarter, the highest in the region, bringing our first half 2022 GDP (gross domestic product) growth to 6.9%. This means our GDP growth is likely to be at the upper end of the official growth forecast range of 5.3% to 6.3%,” he said in his speech at the opening of Invest Malaysia 2022 today.
Abdul Wahid said one of the main contributing factors to Malaysia’s economic recovery coming out of the Covid-19 pandemic was the government aid stimulus packages, amounting to RM530 billion throughout 2020 and 2021, which helped cushion the impact of the crisis and the spillover effects on the economy.
Additionally, Malaysia has over the years diversified the structure of its economy to be less dependent on commodities, now contributing only 14% to Malaysia’s GDP.
Malaysia’s economic resilience is also supported by having diversified trading partners, being not overly dependent on any particular country or market.
Meanwhile, Malaysia’s banks are well capitalised, liquid, better managed and effectively regulated and supervised by Bank Negara Malaysia which continues to fulfil its role by mobilising funds to be channelled to productive sectors of the economy.
“These Malaysian banks and financial services companies have significant weighting in both the FBM KLCI and the FTSE4GOOD Bursa Malaysia sustainability index. The seven banking stocks alone – Malayan Banking Bhd (Maybank), Public Bank Bhd, CIMB Group Holdings Bhd, Hong Leong Bank Bhd, RHB Bank Bhd, AMMB Holdings Bhd (AmBank) and Alliance Bank Malaysia Bhd – had combined market capitalisation of RM325.36 billion or about 20% of the total market capitalisation of RM1.65 trillion as at the end-June 2022,” he said.
The financial system is complemented by a RM3.5 trillion capital market, made up of RM1.7 trillion in debt capital and RM1.8 trillion in equity capital.
“Malaysia is also home to the world’s leading Islamic capital markets, totalling RM2.3 trillion representing almost two-thirds of the total capital markets,” he added.
Abdul Wahid noted that Bursa Malaysia will launch a carbon market exchange later this year to enable companies to voluntarily purchase carbon credits from climate-friendly projects and solutions to offset their carbon emission footprint and meet their climate goals.
“The case for Malaysian companies to embed ESG factors in their business strategy and operations to me is clear, the global supply chain is now more discerning and will demand sustainable products and reject sources that are unable to comply,” he said.